JPMorgan Chase Bank has filed a lawsuit against the builders who formed a consortium to buy and develop Inspirada, a 2,000-acre parcel of raw land near Las Vegas, in 2004.

The bank, which formed a lending syndicate to fund the $557 million purchase from the Bureau of Land Management as well as the property's development, alleged breach of contract by the subsidiaries of Beazer Homes USA, KB Home, Meritage Homes, Pardee Homes, Toll Brothers, Weyerhaeuser Real Estate Co., and the Woodside Group. Kimball Hill, another partner, was left out because it has filed for Chapter 11 bankruptcy protection.

The JPMorgan lawsuit, filed Friday, Dec. 5, in U.S. District Court in Nevada, closely mirrors a similar case wherein Wachovia Bank sued and then foreclosed on the 1,700-plus acre Kyle Canyon development, also in the Las Vegas market. That joint venture involved some of the same builders who were invested in Inspirada.

The JPMorgan lawsuit claims that, by failing to buy land from South Edge, the joint venture formed to develop the property, the builders caused South Edge to default on loan agreements. South Edge has been unable to pay millions of dollars in interest and fees or to make principal payments when due, and has also failed "to diligently continue and complete the construction of the improvements on the project without material interruption or cessation in the manner required in the credit agreement," the suit alleges.

JPMorgan is seeking a minimum judgement of $164,723,251, plus attorney's fees. There was no total loan amount listed in the lawsuit, but it did say that the lending syndicate provided a "significant portion" of the purchase and development financing. Development costs were initially projected to be more than $1.25 billion and have since climbed to at least $1.55 billion, the lawsuit said.

Beazer, KB, Meritage, and Pardee, representatives did not immediately return phone calls asking for comment on the lawsuit. Kira McCarron, senior vp and chief marketing officer at Toll Brothers, and Greg French, senior manager of business communications at Weyerhaeuser, declined to comment.

Learn more about markets featured in this article: Las Vegas, NV.